City budget keeps tax levy flat

by Emmitt B. Feldner of The Review staff

PLYMOUTH – For the third year in a row, there will be no change in the city’s property tax levy.

City Administrator Brian Yerges presented the proposed 2014 city budget to the City Council Tuesday. A public hearing is set for the next council meeting, Tuesday, Nov. 12, after which the council is expected to take final action on the budget.

The $7.29 million budget will require a tax levy of just over $4 million, the same amount as for the 2012 and 2013 budgets.

The property tax rate will increase slightly, from $7.02 to $7.05 per $1,000 of assessed valuation, “because property values have decreased a little bit. Over the last three years, they’ve decreased by a couple of million dollars,” Yerges pointed out.

That means the owner of a home assessed at $100,000 would pay an additional $3 in city taxes, if their assessment has remained the same.

“One of the things that has helped us (maintain the levy) is restructuring our debt over the last three years,” Yerges told the council.

As a result, the city’s annual debt service payment has declined from a peak of close to $1 million in 2008 to $455,384.19 in the 2014 budget, Yerges pointed out.

Debt service payments are expected to remain between $450,000 and $630,000 a year for the next decade, according to Yerges.

Yerges said the city lost $32,000 in state shared revenues for 2014, mostly in transportation aid.

State shared revenue will comprise 16 percent of the 2014 city budget, down from a high of 25 percent in 2003.

The administrator noted that the city continues to build up its cash reserves, even with the flat tax levy.

“We’ve made significant progress in building the reserves for the city,” Yerges said. “When I started we had 6 percent (cash reserves). We should have no problem hitting 18 to 19 percent at the end of 2013 and should reach our targeted goal of 20 percent in 2014.”

Building the cash reserve helps boost the city’s bond rating for future borrowing and also allows the city to finance many of its capital projects without having to borrow to pay for them, Yerges explained.

Indeed, he said the city will be able to pay for planned capital projects in 2013 and 2014 with cash on hand and not borrow any money for them.

In the past decade, Yerges told the council, the city has had to borrow to pay anywhere from 35 to 55 percent of the cost of annual capital projects.

The increased cash reserves enabled the city to pay off some existing debt issues early this year, further reducing the debt burden in the budget.

Yerges invited council members and city residents to offer comments and suggestions regarding the budget prior to the public hearing Nov. 12 and promised to provide a summary of those comments to the council before the public hearing.

“We encourage the public, if they do have questions, to come in and ask them,” Mayor Donald Pohlman added. “We look forward to the public hearing.”

2014 Plymouth city budget public hearing
Tuesday, Nov. 12, 8 p.m.
City Hall council chambers

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